As the two biggest economic targets in Donald Trump’s trade war, some analysts thought the European Union and China could move closer together and stake out common ground.

An escalatory spiral that leads towards Eurasia's 10% 'trade war' scenario, however, would prompt Brussels to deploy escalatory measures, such as "export controls/duties, public procurement curbs, and/or penalties on U.S. services exports" by using the ACI "trade bazooka as a last resort," they concluded.

The August 1 deadline gives the countries time to negotiate agreements that could lower the tariffs. Some investors and economists have also noted Trump's pattern of backing off his tariff threats.